Infosys denies reports that its founders aim to sell entire stake in company
Infosys founders have accused the company board of lapses in corporate governance, and criticised pay hikes given to senior officials.
Infosys on Friday denied a report in The Times of India which said that the software company’s founders were looking to sell their entire stake in the firm. The newspaper had reported that the founders were exploring a sale of the 12.75% stake they hold in the company, a stake worth about Rs 28,000 crore. The paper cited people familiar with the development to make this claim.
Infosys “has no information on any such development,” the company said in a statement according to Reuters, adding that the speculation has already been “categorically denied by the founders.” The Times of India had in fact carried a denial from one founder, NR Narayana Murthy. However, Infosys shares were trading down by 1.7% on Friday.
Infosys founders, led by Murthy, have publicly accused the company board of lapses in corporate governance. This has forced the company to appoint a co-chairman to the board and give a $2 billion (Rs 12,857 crore approximately) payout to shareholders in the 2017-2018 financial year. Murthy has also criticised pay hikes given to Chief Executive Officer Vishal Sikka, Operations Chief Pravin Rao, and severance payouts to executives including former finance head Rajiv Bansal.
A top banker was quoted as saying that the stake sale was likely to take place through block deals on the stock market and in tranches. But while Murthy has denied any intention to sell his 3.44% stake, another founder, Nandan Nikelani, refused to comment on the speculations.
The crisis in Infosys comes at a time when the Indian IT sector is facing challenges in the United States, its biggest market. US President Donald Trump’s administration has taken several steps to modify existing visa rules and hike wages, a move that could hit outsourcing firms.
Sikka had earlier said that Infosys was likely to struggle to reach its ambitious $20 billion (Rs 1.2 lakh crore approximately) revenue target by 2020 becasue of a “challenging environment”.